Australia shares edge higher as banks gain, oil prices extend losses

Australian shares trended higher on Thursday, with broad-based gains led by banks, while oil prices extended losses as concerns about Middle East supply disruptions eased.

The S&P/ASX 200 index rose 0.4% to 8,726.7, as of 0007 GMT.

The benchmark closed 0.3% higher on Wednesday. Oil prices fell more than $1 but remained above $100 a barrel as reports trickled in that Saudi Arabia was offering additional crude cargoes through Oman.

Rising crude prices have fanned inflation anxiety, potentially strengthening the case for central banks to lift interest rates to keep price pressures contained.

Overnight, the US Federal Reserve unanimously raised its benchmark interest rate by 25 basis points, and central bank chief Kevin Warsh pointed to a growing need for further policy tightening.

The Reserve Bank of Australia is set to hold its next policy meeting on September 28 to 29, wherein markets imply a near 90% probability of a hike to 4.60%.

Financials advanced as much as 1.7% to a one-week high.

The ‘Big Four’ banks rose between 0.5% and 1.5%. Consumer discretionary stocks rose 0.8%, while real estate stocks snapped an eight-session losing streak to rise 0.7%.

Bucking the trend, energy stocks declined 1.2% following the pullback in oil prices Santos and Woodside were down 1.6% and 1%, respectively.

Gold stocks dipped as much as 2.8% after bullion prices hit a near six-week low before nudging higher in early hours of Asia trade.

Evolution Mining slipped 1.7%, while Northern Star Resources weakened 1.5%.

The broader mining gauge fell 0.3%, reversing the previous session’s 1.4% gain.

In New Zealand, the benchmark S&P/NZX 50 index rose 0.1% to 13,640.13.

Official data released showed that the island nation’s economy grew more slowly in the second quarter than the prior quarter as the Middle East crisis dampened confidence, but the figure came in slightly stronger than expected.